Van Eck Adds China A-Shares ETF

Van Eck has launched a China exchange traded fund that provides investors with exposure to China’s A-Shares.

The Market Vectors China ETF (PEK) tracks the CSI 300 index which consists of 300 A-Share stocks listed on the Shenzen or Shanghai Stock Exchange. A-Shares.

According to Van Eck, China’s government has historically limited access to the country’s domestic equity market, also known as the “A-Share” market. Instead, only a small subset of Chinese equities, known as B-Shares, H-Shares, N-Shares, L-Shares, S-Shares and Red Chips had been made available to foreign investors. This subset is only 28% of China’s total equity market by market capitalization.
In recent years, access to the local China A-Share market—72% of China’s equity market—has become more readily available. Foreign investors who are authorized as Qualified Foreign Institutional Investors (“QFIIs”) may now access the A-Share market allowing new products to offer this exposure to investors. The Market Vectors China ETF (PEK) is the first U.S. registered open-end ETF to offer performance exposure to the local Chinese A-Share market. While PEK does not invest directly in A-Shares, it invests in swaps and other types of derivative instruments that are linked to the performance of China A-Shares.

The net expense ratio is 0.72%.

For more ETF investing choices, see the country ETF directory.